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In the midst of Microsoft’s impending takeover of Activision Blizzard, the gaming business is abuzz with information of serious adjustments inside the firm’s esports division. Recently, roughly 50 staff had been laid off from the division, elevating issues about the way forward for its beloved Overwatch League (OWL) and its city-based franchise system.
The Unexpected Layoffs
As reported by The Verge, affected staff had been knowledgeable of the layoffs unexpectedly on a Tuesday. The announcement got here as a shock to many, leaving them speculating in regards to the firm’s means to maintain esports operations internally.
There are doubts about whether or not a skeleton crew will oversee the conclusion of the present OWL and World Series of Warzone seasons. Unfortunately, this is not the primary time such layoffs have occurred, as round 50 staff had been additionally let go from Activision Blizzard’s esports groups in March 2021.
Overwatch League’s Shifting Landscape
Recent modifications in agreements with Overwatch League staff house owners have added to the uncertainty. After the present Overwatch League season concludes, groups will vote on an up to date working settlement. Failure to achieve a consensus on persevering with with the up to date settlement may result in every taking part staff entity incurring a hefty termination payment of $6 million. The newest earnings report additionally revealed that OWL’s complete income accounts for lower than one % of Activision Blizzard’s consolidated web revenues.
Financial Challenges and Changes
Financial challenges have been a recurring concern for Overwatch League staff house owners. The league initially charged a hefty franchise payment, which later led to groups owing between $6 million and $7.5 million every. Payments had been deferred as a result of affect of the COVID-19 pandemic on reside occasions, leaving groups going through substantial monetary burdens.
The Impact of the Pandemic
The COVID-19 pandemic closely disrupted the Overwatch League’s bold plans. Initially, the league meant to have gamers compete of their respective staff cities each week through the third season. However, the pandemic compelled a shift to an online-only format, eliminating a big income stream from reside occasions. Although reside occasions progressively returned in 2021, the transfer from Twitch to YouTube in 2020 resulted in a drop in viewership, and the league struggled to keep up a constant viewers.
Sponsorship and Market Impact
The league’s repute took additional hits as main sponsors like Coca-Cola, T-Mobile, and Kellogg’s withdrew their assist in 2021 resulting from allegations of widespread sexual harassment and discrimination at Activision Blizzard.
Additionally, the Overwatch ecosystem’s robust market in China confronted challenges as a result of unavailability of Overwatch 2 and different Blizzard video games after the tip of their partnership with NetEase, the writer in China.
Struggles and Attempts to Revitalize
To increase curiosity in OWL, Blizzard allowed second-tier Contenders division groups to compete on the highest degree. Despite these efforts, some groups confronted difficulties, and the Chengdu Hunters turned the primary franchise to completely go away the Overwatch League.
Owning and Running an Esports Team
The monetary burden of operating a aggressive staff has been some extent of concern for OWL staff house owners. Despite receiving round $1 million from OWL, the price of operation ranged from $3 million to $5 million yearly, resulting in monetary losses for many groups.
The Future of OWL and Microsoft’s Acquisition
Given the monetary challenges and uncertainties surrounding the league, it would not be stunning if OWL groups resolve to finish their agreements with the league. However, regardless of the setbacks, Activision Blizzard stays dedicated to supporting Overwatch esports. OWL Commissioner Sean Miller expressed optimism for a revitalized world scene that prioritizes gamers and followers.
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